HOUSTON Jan 27 SCANA Corp's utility
unit on Monday agreed to increase its ownership stake in two new
nuclear units under construction in South Carolina, purchasing a
5 percent state from its public power partner for $500 million.
Directors of South Carolina's state-owned electric utility,
Santee Cooper, voted Monday to sell 5 percent of its stake in
the two new 1,100-megawatt reactors under construction at the VC
Summer plant, reducing its share to 40 percent.
SCANA's South Carolina Electric and Gas Co will own 60
percent of Summer units 2 and 3, which are among the first
advanced-design nuclear reactors to be built in the United
States in more than 30 years.
The once-predicted revival of U.S. nuclear construction has
been tempered by lower natural gas prices, anemic growth in
electricity demand and the lack of restrictions on emissions of
The only other new U.S. reactors are being built by Southern
Co's Georgia Power unit, along with partners, at the
Vogtle nuclear plant in Georgia.
Since 2011, Santee Cooper has negotiated with a number of
utilities from Florida to Ohio in an effort to reduce its stake
in the Summer nuclear units, saying the recession had slowed the
state's electric growth projections.
Santee Cooper's talks failed to produce an agreement. Only
Duke Energy still expressed interest in investing in the
new Summer reactors.
On Monday, however, Duke said in a brief filing that it was
"no longer engaged" in discussions with Santee Cooper regarding
the potential acquisition of a 5- to 10-percent ownership
interest in the Summer reactors.
Last year, Duke dropped a plan to build two new nuclear
reactors in North Carolina, citing slow growth in power demand.
Santee Cooper officials previously they wanted to reduce the
utility's stake in the new reactors to about 20 percent.
"The past few years have shown unprecedented volatility in
base load fuel costs and increasing regulatory pressures on
fossil-fueled generation," said Lonnie Carter, Santee Cooper's
chief executive, in a statement.
"Today's action reduces our costs to customers somewhat,
while still preserving an ownership level that will position us
well for the flexibility we will need going forward," Carter
SCANA said the additional 110 megawatts it will gain from
the deal will replace a portion of the coal-fired generation it
expects to retire over the next five years.
The increase in ownership of the new nuclear project "will
delay the need to build new gas-fired capacity after 2020," said
Kevin Marsh, SCANA chairman.
SCANA said the 5-percent ownership interest will be acquired
in three stages, with 1 percent to be acquired in late 2017 or
early 2018 when the first new Summer reactor is scheduled to
begin commercial operation. An additional 2 percent would be
acquired before the first anniversary of commercial operation
and the final 2 percent would be acquired before the second
The agreement also provides that Santee Cooper will not
transfer any of its remaining ownership interest in the two new
units until both units are completed, the companies said.
The transaction is subject to regulatory approval.
Previously, Santee Cooper said it negotiated with the
Florida Municipal Power Agency, the Orlando Utilities Commission
of Florida, American Municipal Power of Columbus, Ohio, and the
South Mississippi Electric Power Association.